Stocks gained Wednesday afternoon as investors digested a key monetary policy decision from the Federal Reserve, which included a formal announcement of the central bank's start to tapering its pandemic-era asset purchases.

The S&P 500, Dow and Nasdaq each rose to record levels for another session. As had been widely expected, the Federal Reserve said on Wednesday that it was going to begin slowing the pace of purchases in its crisis-era asset purchase program starting this month. This had been one of the primary tools helping to underpin the economic recovery and financial markets over the course of the pandemic. That asset purchase program has been taking place with $120 billion worth of agency mortgage-backed securities and Treasurys per month over the past more than year.

"In light of the substantial further progress the economy has made toward the Committee’s goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities," according to the FOMC statement.

"Beginning later this month, the Committee will increase its holdings of Treasury securities by at least $70 billion per month and of agency mortgage?backed securities by at least $35 billion per month," it added. "Beginning in December, the Committee will increase its holdings of Treasury securities by at least $60 billion per month and of agency mortgage-backed securities by at least $30 billion per month."

With the tapering announcement now made, the bigger question for market participants has become when the Fed will begin to raise interest rates. The Fed's latest monetary policy decision will not come with updated projections on the interest rate outlook from individual policymakers. However, at the conclusion of the Fed's last meeting, the outlook showed a divided committee for next year, with nine members seeing no rate hikes by the end of next year while the other nine members saw at least one hike.

Still, the persistently hotter-than-expected inflationary pressures in the recovering economy have put the Fed in a difficult spot when it comes to waiting on rate hikes, many economists argued. These elevated levels of inflation might push the Fed to raise rates more quickly than previously telegraphed, some maintained. And in the Fed's latest policy statement Wednesday, the central bank slightly updated its remarks on inflation, saying that "Inflation is elevated, largely reflecting factors that are expected to be transitory." In September, the Fed had said inflation was "elevated, largely reflecting transitory factors."

"The Fed's credibility will be enhanced if Mr. Powell does not have to return to the press conference platform in December, January and March and again have to explain why inflation has risen even further," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note ahead of Wednesday's decision. "The danger has increased that the Fed will be forced into faster tapering an an insurance hike next. spring, or even a sustained inflation-chasing tightening later in the year."

Elsewhere, investors continued to monitor a slew of new quarterly earnings results from major corporations. Earlier this week, the major stock indexes had been buoyed by an extended run of better-than-expected profit results.

Some of the latest names that reported results continued this winning streak. Lyft (LYFT) shares gained after the ride-hailing company posted third-quarter revenue and earnings, excluding some items, that exceeded expectations, with a recovery in drivers and ridership helping boost results. Food giant Mondelez (MDLZ) also offered third-quarter results and a full-year forecast that exceeded estimates. In other corporate developments, Bed Bath & Beyond (BBBY) announced a new partnership with Kroger and plan to accelerate its share repurchases, and the stock surged in early trading.

Other companies, however, bucked the positive trend of stronger-than-expected earnings and guidance. Activision Blizzard (ATVI) shares sank in late trading after the video game company posted weak current-quarter guidance, and Match Group (MTCH) slid as lingering COVID-related impacts in Asia also dampened its outlook.

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4:03 p.m. ET: Stocks reach fresh all-time highs after Fed announces start to tapering as economic recovery progresses

Here were the main moves in markets as of 4:03 p.m. ET:

• S&P 500 (^GSPC): +29.91 (+0.65%) to 4,660.56

• Dow (^DJI): +104.95 (+0.29%) to 36,157.58

• Nasdaq (^IXIC): +161.98 (+1.04%) to 15,811.58

• Crude (CL=F): -$4.04 (-4.81%) to $79.87 a barrel

• Gold (GC=F): -$15.50 (-0.87%) to $1,773.90 per ounce

• 10-year Treasury (^TNX): +3 bps to yield 1.5790%

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9:30 a.m. ET: Stocks open lower as market eyes Fed

Here were the main moves in markets as of 9:35 a.m. ET:

• S&P 500 (^GSPC): 4,627.80, -2.85 (-0.06%)

• Dow (^DJI): 36,014.67, -37.96 (-0.11%)

• Nasdaq (^IXIC): 15,620.03, -29.57 (-0.19%)

• Crude (CL=F): $81.44 per barrel, -$2.47 (-2.94%)

• Gold (GC=F): $1,769.50 per ounce, -$19.90 (-1.11%)

• 10-year Treasury (^TNX): flat, to yield 1.5440%

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8:15 a.m. ET: U.S. private payrolls topped estimates in October: ADP:

U.S. private employers added back more jobs than expected last month, reflecting a pick-up in the pace of hiring as more service-focused companies brought back workers to meet elevated demand.

Private payrolls grew by 571,000 in October compared to September, ADP said in its closely watched monthly report. Consensus economists were looking for a rise of 400,000 jobs, according to Bloomberg data. The month earlier, private payrolls had risen by a downwardly revised 523,000, from the 568,000 previously reported.

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7:16 a.m. ET Wednesday: Stock futures mixed ahead of Fed meeting

Here's where stocks were trading Wednesday morning ahead of the opening bell:

• S&P 500 futures (ES=F): -4.75 points (-0.1%), to 4,618.75

• Dow futures (YM=F): -48 points (-0.13%), to 35,890.00

• Nasdaq futures (NQ=F): +8 points (+0.05%) to 15,969.25

• Crude (CL=F): -$2.05 (-2.44%) to $81.86 a barrel

• Gold (GC=F): -$4.90 (-0.27%) to $1,784.50 per ounce

• 10-year Treasury (^TNX): -1.6 bps to yield 1.531%

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6:03 p.m. ET Tuesday: Stock futures drift sideways

Here's where markets were trading as the overnight session kicked off:

• S&P 500 futures (ES=F): -2.25 points (-0.05%), to 4,621.25

• Dow futures (YM=F): -19 points (-0.05%), to 35,919.00

• Nasdaq futures (NQ=F): -11.5 points (-0.07%) to 15,949.75

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter